Asian Stocks Fall Over Potential COVID-19 Vaccine Hiccup

By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Tuesday morning, with investors digesting a setback in the progress towards a COVID-19 vaccine.

Developer Johnson&Johnson (NYSE:JNJ) said on Monday that an unexplained illness in a participant caused it to temporarily halt its vaccine study. The setback follows AstraZeneca PLC (LON:AZN) halting clinical trials for its candidate AZD-1222, which it is co-developing with the University of Oxford, in early September. Although clinical trials have resumed in the U.K., Brazil, South Africa, India and Japan, AstraZeneca's trials are yet to resume in the U.S.

The Johnson&Johnson news comes after U.S. markets closed higher for a fourth day, with the Nasdaq boosted to its biggest advance since April by a surge in tech stocks such as Apple Inc and Amazon.com (NASDAQ:AMZN).

Apple shares (NASDAQ:AAPL) surged 6.4% on Wall Street on Monday ahead of the expected debut of the company’s latest iPhone later in the day, while Amazon saw its stocks jump 4.8% ahead of the company’s Prime Day shopping event later in the week.

The setback also continues to point towards a bumpy road towards economic recovery, with hopes for the latest U.S. stimulus measures being passed before the Nov. 3 presidential election fading. Senate Republicans continue to reject Trump’s proposal for a $1.8 trillion deal, and House of Representative members have been informed not to expect any action during the week.

“The hurdles at the moment come from the uncertainty around the U.S. election and the uncertainty about the timing and effectiveness of a vaccine,” AXA IM Core Investments chief investment officer Chris Iggo told Bloomberg.

China’s Shanghai Composite was down 0.71% by 10:59 PM ET (2:59 AM GMT) and the Shenzhen Component edged down 0.13% ahead of the release of Chinese trade data, including exports, imports, and the trade balance, later in the day.

The port city of Qingdao also reported a total of 12 new COVID-19 cases, its biggest cluster in months. Investors are also looking to a “crucial speech” to be made by President Xi Jinping on Wednesday in Shenzhen, during celebrations to mark the city’s designation as a special economic zone.

In Australia, the ASX 200 jumped 1.18%. Canberra is seeking clarity from China about the latter’s reported ban of Australian coal imports, which has further soured the relations between the two countries.

South Korea’s KOSPI was down 0.46% and Japan’s Nikkei 225 inched down 0.07%.

Hong Kong markets were closed due to a storm.

U.S. President Donald Trump’s physician Sean Conley said that the president has tested negative for COVID-19 for “consecutive days” on Monday afternoon. Trump is expected to jump back on the campaign trial and try to decrease the widening gap with Democrat candidate Joe Biden ahead of the election.

The hearings for Amy Coney Barrett’s nomination to the Supreme Court also began in the Senate Judiciary Committee on Monday.

Across the Atlantic, European Central Bank President Christine Lagarde will lead the virtual annual meetings of the International Monetary Fund and the World Bank Group, due to kick off later in the day. The meetings will conclude on Oct. 18.

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